Samson Resources amends loan to cut borrowing base, obtains waiver

By Jennifer Chiou

New York, March 19 – Samson Resources Corp. entered into an amendment to its credit agreement with JPMorgan Chase Bank, NA as administrative agent and collateral agent, reducing the borrowing base to $950 million from $1 billion, which resulted in a payment of $46 million to lower the amount outstanding, according to an 8-K filing with the Securities and Exchange Commission.

In addition to that amendment and others, the company also obtained a waiver from the lenders of any default or event of default that may occur as a result of delivering its 2014 annual financial statements containing an impermissible qualification relative to substantial doubts about its ability to continue as a going concern.

Samson Investment Co. and certain subsidiaries are also borrowers under the credit agreement.

The changes also modify the financial performance covenant to provide that Samson will maintain a ratio of consolidated total first-lien debt to consolidated EBITDA of no more than 2.75 to 1.0, up from 1.5 to 1.0 previously, as of the end of each fiscal quarter beginning with the first quarter of 2015 through and including the third quarter of 2015.

At that point, the first-lien debt to consolidated EBITDA ratio reverts back to 1.5 to 1.0 at the end of the fourth quarter of 2015, and beginning with the first quarter of 2016, the company will maintain a ratio of consolidated total debt to consolidated EBITDA of not more than 4.5 to 1.0 as of the end of each fiscal quarter through maturity.

The company must also have minimum liquidity of $150 million after giving pro forma effect to any interest payment subsequent to July 1, 2015 in respect of certain other indebtedness, including payments for its 9¾% senior notes due 2020 and Samson Investment’s second-lien term loan credit facility.

Also, the amendment increases the interest rates on outstanding borrowings by 50 bps and requires an automatic reduction in the borrowing base if the company receives proceeds related to certain asset dispositions or early settlement of certain derivative financial instruments.

Based in Tulsa, Okla., Samson is the largest privately held company of crude oil and natural gas in the United States.

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